Selling internationally can be confusing for most sellers. That is why we pulled together top industry insights for you in this webinar!
Learn the proven strategies on how to increase revenue and decrease your costs selling abroad. Learn these lessons among other tactical tips for selling abroad:
- The importance of selling globally on Amazon
- Sizing up the global Amazon marketplace opportunity
- Understanding Gross Margin and levers to improve it
- Strategies to lower shipping costs and decrease lead time
- Mistakes to avoid when shipping internationally
- Leveraging advertising globally to gain market share and increase organic revenue
Discover more about First Choice Shipping here: https://firstchoiceship.com/
Don’t miss the full transcription of the webinar here:
Let’s go ahead and kick this off. So, today is obviously February 21, 2019. We are here today talking about selling globally on Amazon, and we’re going to be covering actionable strategies for increasing revenue and decreasing cost. So, we are Teikametrics here. First Choice Shipping is our guests of honor here, and let’s actually go through the speakers here. So, I am the dapper gentleman on the left here, Jason Magee, Director of Seller Partnerships, and Pearl, how about you introduce yourself here real quick?
Sure. So, hey, everybody. My name is Pearl. I’m the Director of Sales and Marketing here at First Choice Shipping. I’ve been with the company for almost five years now, and yeah. So, we basically started as a small little mom and pop type of company, and at this point, we are recommended by Amazon for our international capabilities, our Amazon international shipping capabilities. So, yeah, really excited to be here today. Thank you all for joining us, and yeah, Jason, thanks for arranging this.
Yeah. No, thank you as well. I mean, Pearl, as I mentioned, I’ve been looking forward to this. So, you all at First Choice Shipping, you’ve had a crazy run, and you continue to do very well, and you have a direct relationship with Amazon. They actually share a lot of leads with you. We’ve both done webinars with them. So, I definitely want to make sure we cover some nuggets from that vantage point as well. So, a few housekeeping tasks here, continue to ask questions, and we’re going to have a few folks standing by to answer them, but also, we’re going to save some time for the end. So, please ask away, and separately, we’ll go through this with the agenda, which will be next, but we’re going to have some bonus offers for you all. So, stay tuned to the end. So, we have a packed audience here. So, we have a packed audience here. So, let’s just go through what we’re going to cover today in the agenda. So, number one, the importance of selling globally on Amazon. Number two, sizing up the global Amazon marketplace opportunity and sharing some really good data that could help inform you guys as well as where you should be going.
I’m going to take us back to Gross Margin and levers we can pull to help improve it, and then, how to ship to FBA internationally, strategies to lower shipping costs and decrease lead time. Pearl is going to cover a lot about mistakes to be made and how to avoid them. Then, we’ll round that out about talking about advertising globally to gain market share and driving total revenue. So then, with that being said, let’s go ahead and kick this off. You are in the right place if you are already running a successful business on Amazon globally, if you are selling on at least one other Amazon channel outside of your home country, and you’re looking to scale, and last but certainly not least, you’re not currently selling outside of your home country on Amazon, but yet, you’re planning to in the next 6 to 12 months. So, let’s go ahead and kick this off with a poll. Where is your business in regard to selling globally on Amazon. Let me go ahead and launch this poll, and so, it should be popping up on your screen here, and go ahead and select where we are here. I’m going to soon give that another few seconds here. Great. Let me go ahead and close this off then.
Oh, this one’s interesting.
Yeah, it is, isn’t it? Let’s share these results real quick. So, it’s actually pretty even breakdown here. So, we have 30% have never sold outside their home country. About 18% are testing selling globally but haven’t fully committed. Almost 40% are actively selling in at least one other country but plan to scale, and then, the top 14% are folks who are running global businesses already. Pearl, that’s a really good mix here. A lot of times, you have a lot of folks who haven’t gotten started. We have a lot of folks who are selling. Very good.
Yeah. Great. Great. So, moving on to the next one. So, where does Amazon have marketplaces globally? So, Amazon runs 13 marketplaces globally, and I’m sure by the time … a month from now, it’ll probably be more than that. 175 fulfillment centers, 180 plus countries with loyal Amazon customers in over 30 categories, and let’s look at this in a graphical representation here. So, Pearl, you and I talk about this a lot. It’s funny because look how big Canada is, and people think that, naturally, Canada is the great next step, but first off, I mean, talk to me about that first. I know you have a lot to say about that.
Yeah. So, when it comes to expanding internationally, it’s interesting, but basically, the first market that people are thinking to get into is Canada because they think Canada is … it’s right here. On the map, it looks huge, like you could see right here. They speak English. It seems fairly, fairly simple, but people don’t realize that it is just a lot of empty land with a very small population, and it’s actually more complicated with customs going into Canada versus getting into the Amazon EU marketplace, which covers way more territory as far as buyers go. There are millions and millions of buyers combined within the entire EU versus Canada. So, just some numbers to give people an idea. For Canada, they say you should be doing 10% of what you’re doing in the US versus in the EU, they’re saying, “they” being Amazon, you should be doing around 25%. So, as far as I can recommend, definitely go first with the EU versus Canada. This is very deceiving actually if you look at the map. It might look exciting, but not the case at all.
So, when you say EU, is it actually UK or actually all of the EU combined to get that 20 to 25 percent lift?
… then, we’ll explain how we could access all five, all five countries in the EU.
No. That’s great. So, I think a logical next step, and I think this is very important, I’d love to know … maybe I should add another poll … is what market are you guys selling in. UK is typically the best next step if you’re an English speaker already because obviously, it’s actually just a bigger marketplace than Canada, but interestingly enough, Pearl, the second largest marketplace on Amazon is actually in Germany. And I know you mentioned that, in general, it is bigger, but it also depends on category. So, when you’re thinking about where you should expand or whether you’re going to enter a certain market, it really does come down to the category you’re selling in. Is that right?
Yeah. That’s true. I’ve had my customers that are selling electronics tell me that Germany is a bigger market, and then, interestingly enough, I had clients that sell in Spain that will tell me that toys is something that is much stronger in Spain versus the UK or Germany. So, it really depends on what you’re selling. It’s only trial and error kind of thing when you’re starting out.
Yeah. No, absolutely. So, I think there’s a lot of really powerful nuggets as we see that we just said here. So, if you’re selling in Canada, you should expect about a 10% addition to the GMV you’re doing in the US. If you’re selling in Europe, you could expect 20 to 25 percent, and then, even though Germany is the largest marketplace, there are some challenges when it comes to translation, et cetera, compared to the UK. So, a lot of folks typically start with the UK.
Great. Great. That’s very good. So, where’s this growth coming from? So, this is from Marketplace Pulse, and this shows a graphical representation of new sellers who launched on Amazon’s marketplace last year in 2018. So, in 2018, more than 1.2 million sellers joined Amazon’s marketplace. This equates to 3459 new sellers every day or 144 every hour or the equivalent of two every minute. So, what’s awesome about this is, yes, Amazon US got 28% of the new listings, and all these other marketplaces, which are very big and large, they actually got less new sellers started there, but collectively, the crazy thing about this stat is nearly three in four new sellers on Amazon’s marketplace were not started in the US, which is Amazon’s largest channel. Yeah. So, let’s actually dive in and just look at North America. So, this is a graph that comes directly from Amazon global selling. So, the misnomer here is that North America is obviously inclusive of Canada. Canada represents probably less than 10% of that total number, but even if you keep Canada in there, there’s 170 million unique visitors a month on Amazon in North America. In Europe, that’s another 125 million.
So, what we’re showing you here is if you’re not focusing on selling outside of the US, and depending on the product you sell, et cetera, is you could be shooting yourself in the foot missing out on double the amount of revenue and double the amount of exposure. So, I mean, pro to your point, look how big Canada is on this map, but it represents such a small part of it.
Yeah. Amazing. Wow.
Yeah. So, Pearl, let’s you and I tackle this together about why to sell globally. So, Pearl, number one, growing your brand and growing market share and being able to sell outside of one country. You and I have seen this shift of all resellers exclusively, five plus years ago, and then, this massive shift to private label, and you’ve seen that in your own business as we do as well. I mean, let’s talk about just the ability for brands to actually gain exposure outside of their home. I mean, they don’t have the restrictions that a lot of other resellers do, right?
Yeah. Yeah, absolutely. So, I’ve seen … The trend for the last couple of years were the very big sellers were reselling many different, very different products video electronics, clothing. What we’ve seen happening over the last year is these huge sellers, we’re told the top 100 Amazon sellers, are all starting their own private label brands, so they could differentiate themselves in the market, and number two, there are so many new restrictions now when you’re reselling products. When it comes to the whole private label game, this is how people are able to become a global brand. They start out in the US. They expand further. So, we ship from China, too. So, we’ve seen such a big uptick from these sellers that were just shipping from the US out are starting to bring in from China their own private label brand. So, it’s been really interesting to see how things are changed, and using this global Amazon selling, too, they’re becoming a household brand in places all over the world. It’s pretty amazing.
Yeah. Yeah. Absolutely. I mean, now at Teikametrics, probably 85 plus percent of our folks who use us are their own private labels or their actual own brands. We see the stats and the articles every day about … and Apple actually now sells on Amazon, and they didn’t before. All these big … J.Crew is running their own storefront on Amazon now as well. It’s becoming the marketplace for everything, even large brands. It used to be, oh, if I didn’t care about the brand, I’d just go buy something cheaper on Amazon. That’s not the case anymore. People are starting their searches on Amazon.
So, the next thing here is product life cycle and product market fit. I love talking about this one because we talk about a lot about when you advertise in general, you have to consider where your product is in its life cycle, but what I mean by that as an example is fidget spinners, for instance, were huge in the US, and as the fad sort of started to die out and fade away, it got very large in Europe. So, you’re actually able to take something that would run the end of its life in the US, but imagine actually duplicating that and then selling it in Europe. You’re able to add to the life of that product and still get sales out of it. So, that’s something to really consider as well, and Pearl, I know you had a few examples you could probably talk about here as well, but I mean, it’s just you really have the ability to extend the life cycle.
Yeah. Absolutely. So, obviously the trends are usually starting out in America. All the newest styles, for example, with clothing, different shoe styles, or different designers, and very quickly, it does get saturated on the US platforms, and those smart sellers, when they see the saturation happening on their listings, they’re going to just take the product and quickly send it out someplace else to the UK or even to Japan, and Amazon has FBA capabilities there. So, they’re easily able to do that, and they’re ahead of the game, and they’re actually going to sell it at a higher price because they’re not competing with so many other sellers.
Well, that leads to the next point here, the next point being less competition. So, just as you think of a product that’s kind of ran its course here, sell it abroad, or simultaneously, while you’re selling a widget here, like iPhone cases as an example, you can sell an iPhone case in the US. You can also sell it in Europe because it’s ubiquitous in that sense, but because there’s less competition, and there’s less iPhone cases for sale in those marketplaces, you can sell your same iPhone case at a higher price. Again, this doesn’t work for every category, and this goes back to the future of looking into one of the things, levers you can pull about increasing your sales price. You could be selling less units but yet at a higher price and still having a very large, even an increased margin by selling in these other regions as well.
Yeah. Absolutely. So, moving on from that, next one being seasonality. So, we talk a lot about this as well. Think about Australia. Amazon Australia launched. They’re completely flipping in terms of their seasons. So, when it’s our summer, it’s their winter and vice versa. So, if you’re selling beach gear of sunglasses in the US, in the off season when sales slow in the US, it’s heating up in Australia or other parts of the world. So, you could really be capitalizing like you’re turning a seasonal business into a year-round business at the exact same time.
Yeah. This is the best thing that happened to so many of our sellers. The fact that they’re able to not have to wait a full year to bring stock out, and like you said, sunglasses. Sunglasses, you could add new styles every year, and whatever you’re selling now could be out of style next season, and now, the fact that you can send it out to Australia is amazing.
Yeah. No, it’s incredible, and the last one here is diversifying risk. You and I can tackle this from a number of angles. I come from the world of profit and currency. So, as a dollar weakens, let’s say, in the US, you could actually be more profitable selling in the UK. That’s just one example and not to mention not limiting everything you sell to one channel. There’s just a lot of ways that we could approach this one. Great.
Cool. Yeah. Absolutely. That’s definitely something I would’ve recommended as well. In the UK, for every dollar they earn, you’re basically getting another 50 cents just because of the currency difference. So, it’s amazing.
Yeah. If you ever sell at a higher price, and the currency is in your favor, that’s just another reason to sell outside of your home country. And look, I know where we’re referencing, we’re very heavy with a lot of US listeners. I know we have folks who are maybe somewhere else, and the US isn’t their channel. The same methodology applies to other markets as well. So, not that we understand how massive the opportunity is, I want to go back to the basics of defining profit, which is the whole reason we sell on Amazon, and it’s something that’s very core to what we talk about here at Teikametrics. I mean, you’re in the business of lowering shipping costs and opening up. We’re in the business of optimizing for profitability. So, let’s take a look at this. So, let’s just take the … working left to right here. Let’s say you have a widget that sells for $100. You’re obviously not making $100. You have to consider the Ad Spend, the FBA fees the Amazon’s Commissions are taking, the Pick, Pack, and Ship It, and then, you have your seller cost of goods, which is both how much a cost on a per widget basis but also the shipping costs.
So, you have to consider when you’re actually selling something what your true profit is going to be when you actually finally close that sale, all expenses included. So, let’s look at three different ways you can impact this when you’re selling internationally. Number one, you can increase your total revenue. You can obviously either sell more units, even if you’re making less per unit or the same amount. You can just sell more. Number two, you can increase your sales price. Pearl, you and I just talking about this for less competition. You actually could sell widgets in another market at a better margin because you could increase the sales price, and then, the other one, which is … Pearl, you’re going to crush this when you talk about what you guys do at First Choice and just the industry in general, which is you can actually just lower your costs. So, you can actually have more refined advertising spend. You can lower your shipping costs. Those are all examples of ways that you can impact this. So, real quick, I know we had a good question from Leo about patents and trademarks. I’m not an expert in this, but I do want to touch on it.
There are a lot of ways that you can make sure your patent works globally. Matter of fact, if you’re trying to get a patent done globally, Chad Rubin from Skubana actually mentioned that you can file for an international patent in France, and the turnaround time to get that patent or trademark approved is a lot more expedited than it is in the US. So, I know that’s a little bit off from what we were covering here, but Leo, that’s a really, really good question. Yeah. So, Pearl, now let’s go into these three options, and this is where I really want to leverage your expertise when it comes to shipping and how shipping works on Amazon globally. Now, you can lower your costs as well as just a look at the basics of what you need to consider when you’re selling in Europe or other countries.
Okay. Perfect. So, let’s get right into it then. So, first thing, I just want to make sure that people understand why you actually need to have a shipping provider to make this happen. Most of you sellers are selling in the domestic country that you’re living in, for example, in the US or in the UK, and you’re able to buy labels or LTL services directly from Amazon directly. Amazon obviously ships a ton, and you’re able to get those really cheap rates directly from them, leveraging their value, but when it comes to the international market, they do not want to get involved with shipping. There’s all the custom requirements, and there’s VAT laws and all that kind of stuff that they don’t want to get involved with. So, they leave it up to the seller to figure it out on their own. So, when you’re going into seller central and actually creating your work order, Amazon will just give you the address where to ship it to, and then, it’s up to you to find out how am I actually getting my product there. So, that’s number one.
Some of the other reasons why you will need to figure this out on your own, some of the requirements that Amazon has is that you need to act as the importer on record. They don’t want to act as the importer on record. Some of the things that you should know about that we’re going to touch a little bit further down, I’m just going to brush through this really fast, Jason, because we’re going to dive into it a little bit more detailed later. Things that you should know about is making sure to choose the right HS code, which is basically the code that customs has on file for the product that you’re shipping, and I’ll explain a little bit more on how that works. Another thing that you should know about when you’re shipping internationally is that you must have that number in order to be able to do so. I know there is a misconception out there, people saying, “Oh, I am not registered as a company there, or I am registered as a company there. So, I don’t need to have the VAT number.”
Don’t have obligations. Yeah.
Yeah. So, you must have a VAT number in order to sell. For example, on Amazon UK’s platform, they will otherwise suspend your account. So, you can’t even sell there without having one. So, yeah. Let’s go right into it, and let’s talk about the different options.
Real quick on this, so, a couple things that I just want to reiterate. So, what this means is that if you’re based in the same country you’re selling in, Amazon is very good about if the goods are coming from that country, and it’s getting shipped there, they have a local … They have partnerships with UPS here as well, but once you’re shipping across borders, you need to look at an alternative service that Amazon doesn’t provide. So, there’s two things here. One, you can certainly do this on your own or go out there and find your … and there’s companies that can help you with any of this. There are companies like First Choice that can help you with this as well. So, obviously, it’s really just about educating you all as this is happening, and then, for those who don’t know, VAT is value added tax. That is the equivalent of … similar to sales tax in the US. So, it’s just something that every … instead of we have it on the state-to-state level, they have it on a country level. So, it’s actually a lot easier to follow than local sales tax in a lot of ways. You just have to register for it. So, with that being said, Pearl, let’s go onto the next slide here.
Perfect. Okay. So, let’s talk about Amazon UK, and I do want to give a shout out to all the other markets that Amazon has, and one’s FBA. So, people that are already selling in the UK should be aware of the options that are out there. There’s Amazon Canada. There’s Amazon Europe, which includes France, Germany, Italy, and Spain, and the UK. There’s Amazon Mexico. There is Amazon India. There’s Japan. There’s Australia. Yeah, and very, very recently, there is Amazon Dubai, which is basically under wraps right now. People don’t know about this. This is going to be launching. It should be launching any day now. So, there’s a marketplace called Souq that Amazon bought off like five years ago. That is a huge marketplace, over 40 million buyers a month. It’s an English market. The VAT is very low in Dubai. It’s only five percent. So, it’s definitely something that I want to make people aware of because what Amazon’s doing in the next couple days is they’re going to convert Souq into an Amazon platform. So, the way it looks like in the US right now, it’s going to look just the same way, and there’s going to be FBA capabilities, which is super exciting because, obviously, it’s so much easier to do it that way.
Yeah, and I’m going to explain right now how that works in the UK, which right now is definitely the second biggest market after the US. So, let’s get into it. So, how do I get into the Amazon UK marketplace? So, there’s two options that Amazon gives you on how to actually be Prime eligible on those marketplaces. So, they have a program called the EFN program, and then, they have a program called the Pan-EU program. I’m going to start with the Pan-EU program first because I’m just going to go through it briefly because it’s not the kind of program that we highly recommend, especially for sellers starting out just because of how difficult it is to get it set up and how expensive it can get. So, what Pan-EU means is that I’m going to create a work order in Seller Central. Amazon will give me one location to ship it to in the UK, and then, once my inventory is there, Amazon will take my inventory, and they’ll distribute it evenly throughout the entire EU, which includes warehouse facilities in France, Germany, Italy, Spain, Poland, and Czech Republic.
Now, it sounds really good, and it is good because my product is going to be closer to my customers, which results in obviously a more optimized listings because my product is closer to the customer, like I said. But what happens is you’re now legally required to have a VAT number registered to each of those seven countries, plus you’re liable to file your taxes every single quarter or even monthly. Some of these countries require you to file it monthly. So, you have a cost of registered it, which these tax agencies charge a lot of money for, plus you must file your taxes, which is a headache, number one, and it’s also expensive to have somebody do it for you. So, what we recommend is going for the EFN program, which stands for European Fulfillment Network, which basically, the same thing. You’re going to be shipping your product to one location in the UK, but the difference is is that it stays in the UK, and if somebody places an order, let’s say from Germany, Amazon, for a small extra fee, will go ahead and fulfill my product directly to the customer in Germany.
So, the benefit of that is that I only need to have one VAT number in the UK, and my shipping will be cheaper, shipping for other countries besides for the UK. If you’re shipping it directly to those countries, customs is a nightmare. Other benefits, your product will be there available much faster because if you’re getting, like I said, with a Pan-EU program. If I’m starting with Pan-EU, it could take me a few months until I’m going to be fully set up with all the registrations needed. So, we recommend going with EFN. You get your VAT number within 7 to 14 days. You could be live on Amazon. It’s super fast, super easy, less requirements, and you’re going to be Prime eligible throughout Europe. And Jason, to your point, you mentioned earlier about having your listings translate over into other marketplaces. This is going to be definitely a huge benefit as well on that side of things. So, that’s basically it about the EFN program, definitely highly recommend going through this way, just to make your life easier, and you’re going to be there much faster.
Yeah. Absolutely, and that’s great, Pearl. I just want to address another question by talking about Brexit and how it’s going to affect shipping in the UK. So, just for those who don’t know, Brexit … excuse me. The European Union was established of 28 of member countries who all came together to form a collective, much in the way we go state to state. This is a collective of countries that are actually even closer together than our states are. What they do is they have a free trade arrangement between the UK and Europe, but there was a referendum two years ago where the UK decided to leave the European Union. So, in theory, yes, and it is going to change somewhat, the trade relationship between the UK and Europe, but they are such big trading partners that they are already working very specifically how that can be rerouted. At least going this way, you would have … I mean, going this way would still be a lot easier than actually going through the Pan-EU program when it comes from a VAT and tax perspective.
But again, consult a tax advisor. That’s not what we do here, but the thing I’d say about that is that we will know about the specifics and given lead time, in terms of when things will switch over if things do change. Right now, it seems that they’re actually much in the camp of trying to make sure that it’s as smooth as possible because there’s a lot of money to be made keeping things similarly to how they are, but then again, none of us have a crystal ball. So, Pearl, real quick back to you then. Let’s talk about the four biggest mistakes when shipping to Amazon and Amazon FBA international.
Sure. Let’s do it. Okay. Yeah. So, mistake number one, which I found to be the most popular mistake that sellers are making or doing, rather, is marking your shipment with the incoterm of DDU versus DDP. Now, let me just backtrack just one moment here and explain what I mean by that. So, when you’re shipping internationally for those that are not selling internationally yet, you need to include something called a commercial invoice together with your shipment. What’s a commercial invoice? It’s like a regular invoice just stating to customs what am I shipping, what my value is, so they know how to charge you for the taxes. Now, when you’re creating that invoice, there’s going to be a section that you need to include something called an incoterm that will let customs know, and the shipping company, how am I paying for the shipping. So, that’s where you would need to include something called an incoterm that will tell them exactly what they’re asking.
So, DDU, what does DDU stand for? It stands for duties and delivery charges are unpaid, and what people are doing is they’re writing DDU because in normal international standards is when you’re shipping out to somebody internationally, you’ll market as DDU because usually the receiver is the one that needs to pay for taxes, but we’re talking about Amazon here being your receiver, and you must make sure they’re not going to owe anything, and this is one of the many reasons why they don’t owe for shipping is because of something like this. So, they would be offering shipping. They would be left with VAT taxes up to the roof. So, we need to make sure that you’re marking your shipment with the incoterm DDP, David David Paul, which basically means everything gets paid for, that either your shipping company will pay for all the charges on your behalf, or you yourself will be paying it however the agreement is on your end with your shipper.
But make sure, use that term because the customs department at this point are so familiar with this mistake that even before it gets to the end receiver Amazon, they already refuse your shipment, and they send it back, and most people just end up racking up such a high bill that at this point, they end up giving up. And I’ve found that this is the biggest mistake that people end up making, and this is where they end up stopping. So, just be careful with that.
Very good to know. No. Very good to know, for sure, and these are just small things that you could easily just makes you’re you do right up front and to save yourself a lot of headache later.
Okay. Mistake number two, importer of record. Importer of record, so we touched upon this earlier, and I just want to explain exactly what that means. So, importer of record is the person or the company that’s responsible for the security of your shipment. So, normally, the receiver will be the importer of record because it needs to be the address in the forwarding the country that will be acting as the importer of record. It needs to be an address in the domestic location wherever you’re shipping. Now, again, Amazon does not want to be the importer of record. Normally, when you’re shipping internationally, again, the receiver will be the importer, but you cannot have that option when it comes to Amazon. So, you must make sure that you have a solution of how to make that work. You can have an address in the forwarding country, like in the UK, for example. You can have an address over there that will act as the importer. So, when you’re filling out your commercial invoice that we spoke about earlier, you’ll have a section called the importer of record section, and you’ll make sure to put in that address, that name. Do not include Amazon because this is another reason why customs would refuse your shipment. So, yeah, definitely make sure the importer of record is not Amazon.
Very good to know. And again, a small mistake that you could actually just ensure that you just avoid and save you a lot of headache again. So, FBA mistake number three.
Absolutely. Okay. Using the wrong HS code. Okay. So, let me just explain what an HS code mean. An HS code is … some people call it a Harmonized Code. Some people call it a Tariff Code. Just want to make sure people understand what I’m talking about. So, ever item that you’re shipping has an HS code in customs database, and when they’re clearing your shipment through customs, they’re going to include a number that equals your product and clear it that way. Now, every number obviously has a certain tax read applied to it. Now, just as an example of why something like this is super important, when you’re searching for the correct HS code when you’re putting on your commercial invoice what I’m shipping, if you’re not going to include an HS code, or you’re going to include HS code, for example, I’m writing clothing instead of writing specifically if it’s children’s clothing, or it’s adult clothing. What happens is customs looks at clothing, and they’re like, “Okay. So, what are we classifying this as?” And in there database, they’re just going to go to the top of the list, and they’re just going to use the most expensive code they have on file, just that’s how the process works.
Whatever’s on top, that’s what they’re going to go with versus if you would go very specifically and tell them, “I am shipping children’s clothing,” which happens to be exempt of that, and versus just writing clothing, and then, they’re going to just put it under adult clothing, which does have a VAT rate of 20%. You’re actually going to be saving yourself a ton of money. So, make sure when you’re filling out that commercial invoice, number one, include an HS code. Number two, make sure the HS code you’re including is the right one, and if there’s a cheap HS code to go with, go with that, and if you need help looking for one, just ask, and we could you do that.
Yeah. Exactly. I mean, matter of fact, it’s actually a part of your solution. It’s a free solution you guys provide, right?
Yeah. So, this is actually a screenshot of what it looks like on our portal. It’s a free tool, the duty and tax calculator tool. It actually works in integration with Pitney Bowes, which obviously is a very reputable company. So, it works in real time. Normally, if you want a subscription, it would cost around $50 a month. With us, it’s free of charge.
Great. That’s awesome. Pearl, two quick questions for you. Does seller fulfilled Prime exist in Europe?
I don’t believe so. I am not 100% sure.
I’m pretty sure it does not, but the question was, “Is it possible to be Prime eligible if you use a company like DHL?” The thing is the way it works, especially in the US and which it would be the same internationally, is the 3PL, which is the third-party logistics company that you work with, they have to be credentialed and meet the standards of seller fulfilled Prime. So, it wouldn’t be like a courier DHL. You’d actually have to go with a 3PL that actually is eligible for the program. Is that right?
Exactly. So, they have to go up to the standards of Amazon with seller fulfilled Prime. It has to be a two day shipping option. So, you can’t just go with anybody. So, yeah, but I don’t believe they have it, but whoever had that question, feel free to message me after, and I’ll ask my contacts at Amazon.
That’s Jacob, and then, Carl had a great question, which is, “Doesn’t Amazon collect VAT taxes from customers who purchase products?” Amazon requires that your VAT tax be included with the sales price of your product. So, I’ll give this one to you, but yes, essentially when you sell a product, you have to know that 20% of it is going to go the the VAT. You’re collecting that from Amazon. So, you’re the one who actually has to make that payment. Is that right as a seller, Pearl?
Yes. That’s right. So, Amazon collects it, but it’s your duties to actually go ahead and submit it into the HMRC. They’re not going to do that for you.
Yeah. Okay. So, this is a very common mistake that people make before starting. They don’t realize that the same way Amazon doesn’t provide international shipping, they’re not going to provide international shipping the reverse way that if you have unfulfillable product that needs to be removed from Amazon, they’re not going to send it back to you because they don’t ship out of the country. So, you must make sure that you have a solution in place with a domestic address, let’s say for the UK or Canada or Australia, wherever that is. Make sure you have a warehouse in those locations or a that you can work with that has one that you can ship your product to, and then, from there, there are different options that they could do for you. For example, they could relabel it if the product is brand-new and ship it back into Amazon, or if it comes to a point that you just want to back out your location in the US or wherever else, they can consolidate those returns because I’m sure you guys all know that Amazon will literally send your returns back the same way when you place an order from Amazon, a ton of boxes.
So, if we’re going to be shipping it back to you that way, it’s super expensive. So, you want somebody that will consolidate those boxes for you and ship it back to the states that way, or I know there are many options of having a company that will work for you that will buy the goods off and then sell it, and they give you a percentage, or they will take a percentage. So, yeah, definitely look into those options before starting because you don’t want to get stuck, and then, Amazon is going to give you a timeframe when it’s actually going to be disposed, which I know sellers have struggled with this in the past, and it’s so not worth it.
And there’s a couple things to consider here as well. So, number one is a category in which you sell in. So, if you’re selling furniture or larger ticketed items, yes, the way the cost benefit of where you want that chip and what you want to do with it. At the same time on the other end of the spectrum, let’s say that you have a lower valued item. Let’s say a charger. It’s cost-prohibited for you to send it back and then try and resend it and resell it on Amazon. You can work with companies out there that will actually buy your return to inventory and actually sell it on your as well. This is also another important component, too, is look at the country of which you’re selling into as well. So, one particular example is Germany. So, German buying behavior is different than that of the UK. It’s different than that of the US. So, Germany, for instance, if you were to buy, they’re much more customary. They wanted to buy an iPhone case. They may buy five colors of it knowing they’re going to return four. So, you have to make sure that you take that into account.
In the UK, for instance, their return rate is so much lower compared to a lot of other places of the world. So, you can expect less returns there as well. So, to think of the context of which the buying behavior … how it is and how it exists as well, and again, there’s a lot of resources on this as well, and there are a lot of folks who specialize in understanding some of this stuff, but wanted to make sure I at least touched on that as well.
Perfect. I just want to touch up on … I see a couple of attendees have asked about Amazon disposing or rather destroying your product. Yes. They can do that, but if you’re … like what Jason said, there are something products that are really expensive. You don’t want that to happen. So, make sure you have an option in case you’re selling high valued products. For example, cameras or camera lenses, just make sure you have an option to bring it back instead of Amazon disposing it if it got returned back to them.
That’s exactly right. Yeah. That’s exactly right, and then, I see Freddy asked a question of whether you guys provide international address for returns, and I can answer this, and the answer’s yes because you have warehouses there, yeah?
Yeah. So, wherever Amazon has an international location, we have a warehouse to assist with returns. So, absolutely.
Great. Great. Awesome, and then, moving on here, pro-tip number one, Pearl, I love … I mean, this is me plugging you guys here a bit, but also, it’s not just you all. Some folks just go directly to DHL or FedEx to ship something globally. You actually can save a significant amount of money going through an FBA broker, and Pearl, I know you guys are our brokers of numerous different carriers as well. So, you guys can get folks anywhere within 60 to 80 percent off their shipping fees globally. Do you want to talk more about that?
Yeah. Absolutely. Thank you. So, the same way Amazon provides those super cheap rates for the US sellers or UK sellers that are based in the UK, same way they do that, we do the same for the Amazon international market. So, Amazon drives a load of business to us, and we get those really cheap rates from the carriers because we ship a lot with them. So, we’re passing those savings over to our customers. So, we work with carriers like FedEx, DHL, UPS. We go direct with the airlines as well for the larger shipments, pallet amounts, and then we work with steamship lines for the ocean freights. So, very large shipment, so we could help with pretty much any kind of a shipping method, and with us, the rates would be super competitive versus going directly with the carrier because we already have that credit with the carrier for many years now.
Yeah. That’s incredible. Perfect. So, moving on to the next bit here. So, Pearl, you mentioned quite a bit of this as well, but let’s just go through a couple of things that you guys actually provide.
Sure. So, we provide an importer of record address for all our clients using our dedicated shipping platform where our sellers are able to create those shipments. We’ll automatically have you act as the importer of record with our international addresses. Our support is amazing. Jason, I know we share many clients, and you know that yourself. You go online. You’ll see our reviews. I let the black and white text spoke for itself. So, the support over here-
I love that.
Yeah, right. So, we’ll have our team really walk you through every step from the registration down to your shipment directly into Amazon’s door. Again, about our online portal, that will just simplify the process, will take you three to four minutes from start to finish to create those shipments. Our services don’t have any service fee or any monthly fee like other platforms have, being shipping companies I’m referring to. Again, about the rates, our rates are up to 80% off the carrier’s published rates, and we are offering a special for today’s webinar attendees, which is a big one. So, we’re offering free VAT registration in the UK for anybody that will mention Teikametrics. So, that’s a big one.
Yeah, and that’s equivalent of $1000. So, that’s very generous of you. Thank you. Great.
So, moving along here. I know we have 10 minutes. So, just going to shift gears to talking about advertising. So, we’ve covered lowering your costs. Now, how can we gain meaningful revenue and increase sales velocity? So, firstly, the most important thing you can do is have a properly optimized listing. I cannot say this enough, and I have to continually say this, but hopefully, it get through to some folks here. Google Translate, do not use it. This is a horrible recipe for disaster. Have a native speaker write it for you, and this even goes for the UK. You think they speak English. They obviously certainly do, but the words are different. We say sweater. They say jumper. We say tennis shoes for tennis shoes. They refer to them as trainers. So, you need to make sure that if you translate a listing that even is for Canada or the UK, changing your Z’s to S’s for a lot of words, these are very simple things that will make you stick out like a sore thumb, or worse yet, not even get found because it doesn’t follow along with the actual buying habits in their own language.
So, pro-tip number two, I know we all talk about optimizing our listing and the copy of it, but I cannot express this enough. Do not forget to translate infographics. So, here’s an example of a company that is a very successful company that sells predominantly in the US, but they sell refrigerators, but notice the second bullet, keeps chill all the way down to 34 degrees. Now, if you’re in the US, this makes sense because it’s Fahrenheit. That’s the temperature, obviously, just above freezing, but for somebody who’s on Celsius, they’ll think that this is … They’re going to serve you beer that’s as cold as Saudi Arabia in the middle of the summer. So, you need to make sure that you actually do translate your infographics as well. So, now, that’s been covered. I’ve said my piece there. Let me share this quote that was shared by Marketplace Pulse. We all know how big of a behemoth Amazon’s advertising platform has been. Their run rate’s over $10 billion. The internet makes it possible for any product anywhere in the world to be found on Amazon. How do shoppers find your brand? That’s via advertising. So, poll number two, are you already leveraging sponsored products globally?
So, let me go ahead and quickly launch this poll, and yeah, let’s go ahead and see what these results are here as well. Give us one second. You should see it pop up here momentarily. I love the engagement. Thank you, folks, for tuning in. We’ve maintained a strong attendance, which is incredible. So, thank you all so much. So, let me go ahead and close this down here as well, and let’s share these results. So, we have a lot of folks here. 66%, that represents actually a lot of folks who are selling internationally. They just aren’t using it yet. So, we know a lot of folks are selling internationally but not leveraging advertising. I’ve dabbled in sponsored products, 20% there, and 15%, it’s a big part of your strategy. That is great, and it’s really good to see folks see the importance of advertising. So, now, let me hide these results and let’s get into a few last nuggets about advertising and really how to just take advantage of it. So, one announcement, Teikametrics Flywheel now supports international Amazon channels, UK, Spain, Italy, Germany, France, India, Mexico, Canada, US, and we continue to add more as well. So, I just wanted to give a quick shout out to that. We just launched that very recently.
So, leveraging advertising the scale globally. Tip number one, run automatic campaigns. We call this the exploratory method. So, why is this important? First off, it allows you to gain first page placement, even with little to no reviews or sales velocity. Then, Amazon is doing the keyword testing for you on your behalf, so you can quickly see which keywords you’re actually converting. And then, lastly, whether you’re testing a brand new market you’ve never been into, or you’re testing a new product on an already success channel for you, this is the absolute best way to test because then, you have a properly optimized listing, and you’re running advertisements against it. But one thing I will say here, the goal here is certainly not profitability. It’s to simply prove that there is demand, and you can gain sales velocity for this product. The way I would recommend selling on a channel globally is actually looking at, “Okay. At scale, if I were to remove X amount of widgets or the same widgets I’m moving in the US or 20% of that, what are my numbers there. Am I profitable at scale?” If that’s the case, then just prove that there’s a demand for your product, and the best way to do that is actually the leverage advertising because once you’ve established that, you usually can take a more refined approach to increase your conversions to lower your costs.
So, tip number two, utilize manual campaigns to mirror your automatic ones. This is the exploitation method. So, what this is about here is for every auto-campaign you run, where you’re exploring keywords, you have a manual campaign where you can actually move your auto-keywords that are performing very well into manual campaigns because within your manual campaigns, you can control the bid better. You can actually refine your keyword targeting and move them into more specific groups. An example is you can have a broad match that you can move into a phrase match. You have phrase match that you can move into an exact match. So, let’s use an example. Let’s say you’re selling men’s boots. A broad match may be boots. So, anybody who searches books, you have the potential to show up for. Obviously, the conversion isn’t going to be as great because you may be looking for kids’ boots or women’s boots specifically men’s boots. Phrase match should be, “Okay. Let’s refine this a little bit more,” and let’s just say if anybody looks up men’s boots or boots men, men boots, that your able to potentially show up. Drilling down even more specifically, if you were to actually hit on the keyword men’s boot size 10, it isn’t as searched, but every search that you show up for, you have a much higher likelihood to convert that sale.
So, that being said, this is going to help you drive more revenue at much better conversion rates, but the beauty here is you’re gaining this revenue at less cost per sale. So, if you go back to the margin we looked at as well, Pearl talked about how you can decrease your shipping costs, which can improve your margin. We’re talking here about how you refine the Amazon cost, which is advertising being one of them as well. So, working with a local, this is the last one I want to leave you guys with. So, tip number three, are you working with a native speaker? If yes, one very good tactic is to get a list of … if you’re first setting up your campaign, you’re going to have an auto-campaign and a manual, it takes a little bit of time, maybe like a week or so, to start seeing automatic campaigns being ran as tests to see whether they’re converting. In the meantime, you can get a list of keywords that they’d recommend adding to manual campaigns, and this way, you’re not just simply waiting on auto-campaigns. The beauty here is if you work with a local as opposed to just guessing, you’re going to make sure that it actually … they’re going to be relevant because it actually is the local language.
The one note I will say is keywords from auto-campaigns are the most important because Amazon’s already done the testing for you. It’s not as simple as going to Google and finding a phrase that people search, and then, dumping all those keywords into Amazon. It’s simply not going to work very effectively. So, if you’re not using a local, and you’re on your own here, as always, wait for your auto-campaigns to come through and trust the Teikametrics data and the keyword actions we give you. So, the reason is is our technology is pulling directly from each local Amazon market. Amazon’s API is our language. So, while you might not understand it, we understand, and we’re pulling this directly from Amazon, but these are the specific keywords, whether they make sense to you or not, that are actually working. We have the ability to actually recommend that for you as well. So, that concludes our time for today.
Our takeaways very quickly. The global Amazon marketplace is massive. Are you taking advantage of it? Amazon’s global FBA program runs very similar to the United States of America. So, leverage the heck out of it. Review the five most common mistakes and how to avoid them, and then, next, whether you’re new to global selling or you’re an expert, advertising is the most effective and measurable way to drive meaningful traffic, and then, Pearl, you mentioned this, but this is very gracious. So, anybody who’s launching in the UK or thinking about it, Pearl and her team at First Choice Shipping will provide a free UK VAT registration. So, Pearl, thank you so much for that.
No, my pleasure, our pleasure. So, I actually will include my email address. So, if anybody is interested in this offer, they can email me directly, and we’ll honor that with the code TEIKAMETRICS.
Yeah. Yeah. Absolutely. Great. And then, we have just rolled out a free 30-day trial of Teikametrics Flywheel, our brand-new next gen solution. We’re offering anybody the ability to try it for free for 30 days. So, visit Teikametrics.com. Feel free to email me directly. My email is jmagee, J-M-A-G-E-E, @teikametrics.com, and I’m happy share Pearl’s email a well, and that rounds us out. I know folks if they need to drop off because it’s the top of the hour. That’s fine, but I know we have some good questions. So, Pearl, if you have a couple more minutes, let’s actually just take some of these. Is that all right?
Absolutely. Let’s do it.
Great. So, the first one is, “Is VAT included in the shown price or added upon checkout?” That’s a question from Alexander.
Yeah. So, Amazon will include VAT. So, you should know that it’s being collected. So, make sure that you’re actually paying that quarterly, and whoever’s helping you with your tax filing will explain to you how you can actually pull those reports out from Amazon and pay it the proper way to the HMRC.
Yeah. Great, and then, the second question, “Does Amazon charge 50 cents to dispose of inventory like in the US?”
I believe the fees are cheaper than in the US, but if you need an exact number, I can get ahead ahold of that for you. So, just email me directly, and I’ll get that for you.
Yeah. Great. And then, Alexander also asks, “Can a 3PL or Amazon dispose of returns on the EU?” It’s going to really be dependent upon the 3PL that they use if they offer that service. So, Pearl, if you want to talk.
A good one should be able to. So, yeah, Amazon definitely could dispose it. So, I don’t know why somebody would remove it and then dispose it at a 3PL. I guess maybe they want to see if the goods are in good condition or not, but a good 3PL should be able to provide you with that service.
And then, another question, too, is going back to the infographics section that we were talking about, can you have a different infographic show on a different ASIN in a different country. So, correct me if I’m wrong, but the difference is if you’re on the EFN network, you have one master listing that anybody can buy from as long as you make it eligible for it to be shipped to somebody in the EU. If you were to go the Pan-European route, and you actually create a local presence on each Amazon market, you actually can have a specific listing for each country that you’re selling in. Is that your understanding as well, Pearl?
Yes. Yes, it is.
Okay. Great. Great.
Okay. I see another question.
Yeah. Go for it.
Somebody was asking, “What value do I have to declare on my shipment when I’m shipping it into Amazon?” So, this is a big mistake people make as well. They declare the full value, what they’re selling it for, on the commercial invoice, when you only need to put on what your cost is. So, your taxes are definitely going to be much lower because the goods are not sold you. Amazon’s selling if for you. So, make sure you’re putting the value of what you purchased it for and not what you’re selling it for.
And another thing, too, the way VAT works … and it’s very complex. So, that’s why you should recommend somebody that could set it up for you, but let’s say my goods cost $10, and I’m selling it for $20. UK is going to charge me 20% of that $20 as the VAT, but I can get a rebate based on $10 as my cost. So, instead of paying 20% on the $20 sale price, I’m only paying 20% on the sales price minus my cost. Is that correct as well?
So, there’s two places that people are paying taxes, and correct me if I don’t understand your question properly. So, you’re paying import taxes when it ships into the EU, and then, you’re paying taxes again when somebody is filing your taxes every quarter. So, people are like, “Wait. So, am I paying taxes twice?” You’re not going to be paying twice? You’re going to have a rebate like what you said. The UK government will have on file how much you paid when it was imported into the UK, and then, whatever you owe them on your sales taxes, for example, you owe them $100, and you pay $20 when importing, you’re only going to have to pay them $80 because you already paid the $20 when you imported it. So, make sure that the freight forwarder, whoever you’re working with to ship the product, that you’re getting a receipt. Basically, what it’s called is C79 form that will have the proof that you paid those taxes, in case they don’t have it recorded properly on their end, they being the UK government. It works the same way for Canada or many other marketplaces. Make sure you have that receipt from the carrier showing that you paid those taxes. So, you’ve that reimbursed when you’re filing your taxes.
Yeah. Awesome. Great. Great, and then folks, lastly, we’re going to be sharing these slides, and I believe this recording will probably go up on YouTube as well. If not, we’ll email it as well. So, you guys are going to certainly get this as well, but I think that’s it from our side. Pearl, we can put both your and my email in this channel as well, but I just want to say thank you all so much for tuning in. Pearl, it was such a pleasure having you join as well. I just want to say thank you so much for all the knowledge here. We kept a packed house here. So, very, very, very good content. Thank you so much, Pearl.
Thank you, Jason. I really appreciate the invite.
Yeah. Thank you, guys, and yeah, we’ll speak soon. Thanks, folks.
Thank you. Take care guys.